Mexico Hedges 2017 oil at $42… WSJ

by Jim Colburn • Tuesday, August 30, 2016

The article suggests that Mexico’s oil price will be covered at $38:

“The ministry said the government spent $1.03 billion on put options that cover 250 million barrels of oil at the equivalent of $38 a barrel for Mexican crude, through 46 transactions in the global derivatives market with seven counterparts.”

“The Finance Ministry said the budget proposal to be submitted next month to Congress will include an oil price estimate of $42 a barrel. The $4 per barrel difference between that and the hedges will be made up using money in a budget-stabilization fund, from which around $1 billion was set aside for the purpose.”

“The budget-stabilization fund is also used to pay for the put options, which this year were contracted between May 13 and Aug. 25.”

Here is the WSJ article:

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